Sanctions Enforcement: MOU between OFSI and OFAC Boosts Information Sharing

On January 13, 2025, the UK’s Office of Financial Sanctions Implementation (OFSI) and U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) published a memorandum of understanding (the MOU). 

Although only just released, the MOU was signed in October 2024, with the aim of facilitating the exchange of information between the two authorities on the implementation and enforcement of sanctions. As summarized below, the MOU contains high-level provisions designed to facilitate and guide OFSI and OFAC’s information sharing approach going forward. 

• Information – The type of shareable information under the MOU is broad and includes documents retained as part of an investigation; names and identifying information related to persons involved in suspected/actual sanctions violations; transaction-related reporting, such as reports made under a license; reporting statistics and economic analysis; and best practices related to business processes, work methodologies, and training of staff.
• Communications – Each authority commits to endeavor to inform the other, as soon as practicable and in compliance with all applicable laws, of issues that may impact the other’s interests.
• Coordinator – The MOU requires both authorities to appoint ‘coordinators’ to serve as points of contact for the receipt and transmission of requests for information between the two authorities.
• Requests for Information – When requesting information from the other authority, the requesting authority should describe the reason for the request, set out its legal basis, and give the other authority sufficient notice to fully consider and respond to the request.
• Controls and Safeguards – The MOU requires both authorities to comply with all applicable laws and regulations, including with respect to the handling of personal data. Information must be shared confidentially, properly handled and transmitted, and (if appropriate) can be redacted or withheld.
• Third Party Disclosure – Unless required by law, an authority will not disclose information received from the other authority without prior written consent. If an authority is compelled to share information by law, they should inform the other authority prior to making the disclosure or promptly thereafter if prior notice is prohibited by law.

By way of recap, October 2024 marked the second anniversary of OFSI and OFAC’s enhanced partnership. In connection with this anniversary, the two authorities published a joint statement on November 19, 2024 (the “Joint Statement”) reaffirming their commitment to their enhanced partnership with respect to the development, implementation, and enforcement of financial sanctions. Themes highlighted by the Joint Statement include:

• Joint engagement with private sector stakeholders, such as the Bank Policy Institute, to discuss the issues faced by industry and potential areas for alignment, recognizing the importance of the private sector as a critical partner in upholding national security goals.
• Collaboration on modernization and the use of emerging technologies to ensure OFSI and OFAC remain at the cutting-edge of sanctions implementation and enforcement.
• Information sharing between the two authorities, both during investigations (as has been historically common) and when conducting analysis to design, implement, and understand the effectiveness of sanctions.

Although the MOU is therefore not a change in policy, its publication highlights the continued cooperation and coordination by OFSI and OFAC regarding the implementation and enforcement of sanctions. While this partnership may benefit businesses through potential alignment of policies and processes by the authorities, for corporations with potential jurisdictional touchpoints in both the U.S. and UK, it is also highlights the need to not only assess both regulatory regimes as a general matter, but to consider the possibility of a coordinated, cross-border enforcement approach in the event that a suspected sanctions violation is identified by one authority or the submission of a voluntary disclosure is being considered and the underlying matter touches on both jurisdictions. 

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